I found two stocks from my scans today, but one I found on my own based on new strength in its industry group. The list of runner-ups includes symbols from my scan results including two Bank candidates. I would still be careful with this group, but their charts are worth a look.
I'm seeing new participation within Gold Miners and decided that I would include a Gold Miner today that should take advantage of any new strength in the group. I will warn that this is a reversal candidate so consider it short-term until it gets going. It is below my preferred price point and is not a penny stock.
As I prepare for my trip, I wanted to let you know that I will hold the Diamond Mine trading room on Friday, July 14th, but there will be no Recap that day. When I get back the spreadsheet will be updated to reflect this week's picks and I'll give you a preview on Friday based on current prices.
We were again canceled on Fox Business yesterday. Erin is in the bullpen, we will let you know when she will be on.
Good Luck & Good Trading,
Erin
Today's "Diamonds in the Rough": CBT, NGD and TFX.
Runner-ups: AGTI, EGO, NBHC, NBIX, ESS and WABC.
** JULY VACATION **
I will be in Europe 7/14 - 7/28 so there will not be any Diamonds reports or trading rooms during that time. I will hold an abbreviated Diamond Mine on July 14th, no Recap that day. All subscribers with active subscriptions on 7/28 will be compensated with two weeks added to their renewal date.
RECORDING LINK (7/7/2023):
Topic: DecisionPoint Diamond Mine (7/7/2023) LIVE Trading Room
Passcode: July@7th
REGISTRATION for 7/14/2023:
When: Jul 14, 2023 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (7/14/2023) LIVE Trading Room
Register in advance for this webinar HERE
After registering, you will receive a confirmation email containing information about joining the webinar.
Here is the last recording from 7/10:
Welcome to DecisionPoint Diamonds, wherein I highlight ten "Diamonds in the Rough" per week. These are selected from the results of my DecisionPoint Scans which search for stocks that could benefit from the trend and condition of the market. Remember, these are not recommendations to buy or sell, but are the most interesting of the stocks that surfaced in my scans. My objective is to save you the work of the initial, tedious culling process, but you need to apply your own analysis to see if these stocks pique your interest as well. There are no guaranteed winners here!
"Predefined Scans Triggered" are taken from StockCharts.com using the "Symbol Summary" option instead of a "SharpChart" on the workbench.
Stop levels are all rounded down.
Cabot Corp. (CBT)
EARNINGS: 08/07/2023 (AMC)
Cabot Corp. is a global specialty chemicals and performance materials company. Its products are rubber and specialty grade carbon blacks, specialty compounds, fumed metal oxides, activated carbons, inkjet colorants, and aerogel. The company operates through the following segments: Reinforcement Materials, Performance Chemicals, and Purification Solutions. The Reinforcement Materials segment involves the rubber blacks and elastomer composites product lines. The Performance Chemicals segment combines the specialty carbons and compounds and inkjet colorants product lines into the specialty carbons and formulations business. The Purification Solutions segment refers to the activated carbon business and the specialty fluids segment. The company was founded by Godfrey Lowell Cabot in 1882 and is headquartered in Boston, MA.
Predefined Scans Triggered: None.
CBT is unchanged in after hours trading. I like the short-term double-bottom pattern and the new PMO Crossover BUY Signal. The RSI just moved into positive territory and the OBV is confirming the rally. Stochastics popped above 80 today. Relative strength is slowly improving for the group, but not great. Relative strength for CBT is slowly picking up. It is a leader within the group based on relative strength against the group. The stop is set below the double-bottom pattern at 7% or $63.63.
This is clearly a short-term trade given the bearish weekly chart. One thing going for the weekly chart is that it shows price is at the bottom of a trading range. I believe it is time for it to test the top at the very least which is a 12%+ gain. I've listed upside potential at 22.7%. The weekly RSI is negative and the weekly PMO is in decline. It doesn't help that the StockCharts Technical Rank (SCTR) is very weak outside the hot zone* at 25.6%.
*If a stock is in the "hot zone" above 70, it implies that it is stronger than 70% of its universe (large-, mid-, small-caps and ETFs) primarily in the intermediate to long terms.
New Gold Inc. (NGD)
EARNINGS: 08/03/2023 (AMC)
New Gold, Inc. is a gold mining company, which engages in the operation, development and exploration of mineral properties. Its portfolio includes Rainy RIver, New Afton, and Cerro San Pedro. The company was founded on January 31, 1980 and is headquartered in Toronto, Canada.
Predefined Scans Triggered: New CCI Buy Signals, Moved Above Upper Bollinger Band, Parabolic SAR Buy Signals and P&F Low Pole.
NGD is up +2.54% in after hours trading so we may be onto something here with Gold Miners. Today's breakout was impressive, pushing price above the 200-day EMA and the 50-day EMA. The RSI is back in positive territory and we have a relatively new PMO Crossover BUY Signal. The group is actually performing in line with the SPY and NGD is improving its relative strength in the short term. Stochastics are in positive territory and rising. The stop is set deeply because today was a fantastic 7%+ move. It is set at 7.8% or $1.08. Obviously this is a very low priced stock so position size wisely. I don't like bringing such a low priced stock to the table, but the chart and upside potential were irresistible.
The weekly chart is mixed, but I see possibilities in the intermediate term. The weekly RSI is now in positive territory and the SCTR has moved within the hot zone above 70. The problem is the weekly PMO which is currently on a Crossover SELL Signal. Price is breaking from a steep declining trend and is bouncing off strong support. I see upside potential at 29%.
Teleflex, Inc. (TFX)
EARNINGS: 08/03/2023 (BMO)
Teleflex, Inc. provides medical technology products which enables healthcare providers to improve patient outcomes and enhance patient and provider safety. The firm designs, develops, manufactures and supplies single-use medical devices used by hospitals and healthcare providers for common diagnostic and therapeutic procedures in critical care and surgical applications. It operates through the following business segments: Americas, EMEA (Europe, the Middle East and Africa), Asia (Asia Pacific) and OEM. The Americas segment engages in the sales of interventional urology products. The EMEA engages in the sales of urology products. The Asia segment designs, manufactures and distributes medical devices primarily used in critical care, surgical applications and cardiac care and generally serves hospitals and healthcare providers. The OEM segment designs, manufactures and supplies devices and instruments for other medical device manufacturers. The company was founded in 1943 and is headquartered in Wayne, PA.
Predefined Scans Triggered: Bullish MACD Crossovers.
TFX is up +0.42% in after hours trading. I see a short-term bullish double-bottom that is about to be confirmed with a breakout. The RSI has moved into positive territory and the PMO is on a new Crossover BUY Signal. Stochastics are rising, but are still negative. The group has been performing well. TFX is beginning to outperform the group and consequently the SPY. I like that I can set a fairly thin stop at 5.4% or $229.85.
TFX is essentially in a trading range, but there is room for it to travel to the top and get a 16.1% gain. The indicators suggest this one will need to be monitored in the short term given the weekly PMO Crossover SELL Signal and weak SCTR. The weekly RSI is neutral, but does look ready to move into positive territory.
Don't forget, on Thursdays I look at reader-requested symbols, click HERE to send me an email. I read every email I receive and try to answer them all!
Current Market Outlook:
Market Environment: It is important to consider the odds for success by assessing the market tides. The following chart uses different methodologies for objectively showing the depth and trend of participation for intermediate- and long-term time frames.
- The Silver Cross Index (SCI) shows the percentage of SPX stocks on IT Trend Model BUY signals (20-EMA > 50-EMA)
- The Golden Cross Index (GCI) shows the percentage of SPX stocks on LT Trend Model BUY signals (50-EMA > 200-EMA)
Don't forget that as a "Diamonds" member, you have access to our GCI/SCI curated ChartList on DecisionPoint.com. You'll find it under "Members Only" links on the left side on the Blogs and Links Page.
Here is the current chart:
Full Disclosure: I am 50% long, 0% short. I want NGD, but with vacation coming up I'm trying to limit exposure away from short-term investments.
I'm required to disclose if I currently own a stock I mention and/or may buy/short it within the next 72 hours.
"Technical Analysis is a windsock, not a crystal ball." - Carl Swenlin
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Watch the latest episode of DecisionPoint Trading Room with Carl & Erin Swenlin on Mondays 7:00p EST or on the DecisionPoint playlist on the StockCharts TV YouTube channel here!
NOTE: The stocks reported herein are from mechanical trading model scans that are based upon moving average relationships, momentum and volume. DecisionPoint analysis is then applied to get five selections from the scans. The selections given should prompt readers to do a chart review using their own analysis process. This letter is not a call for a specific action to buy, sell or short any of the stocks provided. There are NO sure things or guaranteed returns on the daily selection of "Diamonds in the Rough."
Regarding BUY/SELL Signals: The signal status reported herein is based upon mechanical trading model signals and crossovers. They define the implied bias of the price index/stock based upon moving average relationships and momentum, but they do not necessarily call for a specific action. They are information flags that should prompt chart review. Further, they do not call for continuous buying or selling during the life of the signal. For example, a BUY signal will probably (but not necessarily) return the best results if action is taken soon after the signal is generated. Additional opportunities for buying may be found as price zigzags higher, but the trader must look for optimum entry points. Conversely, exit points to preserve gains (or minimize losses) may be evident before the model mechanically closes the signal.
Helpful DecisionPoint Links:
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
For more links, go to DecisionPoint.com